What is Tipping Off? As an Estate Agent do I need to be aware of it?

If you are working in the regulated sector and are required to carry out Anti Money Laundering (AML) checks then the simple answer to the second question is yes. As an estate agent you need to be very aware of the implications of tipping off.

Since earlier this year estate agents and in certain circumstances letting agents became regulated in relation to money laundering regime. It is a legal requirement that they check for proof of funds from a client at the offer stage. Most agents are aware of the new law and have tightened their procedures to ensure that they are compliant. If you do have any uncertainties about the law and how the new regime works you may want to have a look at our blog on AML for Estate Agents.

Suspicions of fraudulent activity need to be reported to the National Crime Agency (NCA) in a Suspicious Activity Report. The NCA may in turn make further investigations into the transaction or the buyer.

Warning somebody that they are part of a money laundering will mean that they change their behaviour to avoid being caught in the act of offending. This includes telling somebody that a Suspicious Activity Report has been made about them. The Suspicious Activity Report would typically be handed to HMRC, the police, NCA or another nominated officer. Estate Agents should be aware that if a Suspicious Activity Report is made, the buyer must not be informed. It is a criminal offence under section 333A of the Proceeds of Crime Act 2002 to tell a person that a report has been made if you know or suspect that you’re likely to prejudice an investigation by disclosing this information. This criminal offence is known as Tipping Off. 

The same offence would be committed if, for example, the police were to request your records of a buyer or a transaction and you informed the parties that an investigation was taking place.

The penalties for Tipping Off are five years’ imprisonment and/or an unlimited fine. We are sure you agree – best avoided.

So the moral of the story is to be vigilant. Make sure that your AML procedures are in place and rigorously enforced and if you do have to report any suspicious activity make sure that you keep it to yourself.

If you are looking for a first rate conveyancing service why not give one of Alexander JLO’s specialist property lawyers a call on 020 7537 7000, click on the get a quote button or email quote@london-law.co.uk for a free, no-obligation quotation? Come and see what we can do for you.

This blog was prepared by Alexander JLO’s property partner Matt Johnson on 31st March 2020 and is correct at the date of publication. Matt has many years of experience of dealing with property work and specialises in new build and shared ownership properties.  His profile on the independent Review Solicitor website and be found here